Hepatitis B virus (HBV) infection is a worldwide health problem. It is estimated that there are 200 to 500 million HBV chronic carriers in the world for whom, to date, there is no reliable treatment. HBV causes both acute and chronic liver disease and the estimated relative risk of primary hepatocellular carcinoma (PHC) in chronic HBV carriers is approximately 100 times greater than in uninfected individuals. Therefore, effective treatments for chronic HBV infection are required. In these studies, the mechanism(s) regulating the initial steps in the synthesis of hepatitis B virus (HBV) DNA will be investigated. HBV DNA synthesis is initiated by binding of the viral polymerase to a stem-loop structure, epsilon, located at the 5'-end of the HBV pregenomic RNA. Initially, the first three nucleotides of HBV minus-strand DNA are synthesized utilizing the amino-terminal domain of the polymerase as a primer and the bulge region of epsilon as a template. The HBV polymerase with the covalently attached trinucleotide sequence is subsequently translocated to the DR1 sequence at the 3'-end of the pregenomic RNA. HBV minus-strand DNA synthesis then proceeds by the reverse transcription of the pregenomic RNA. The mechanism(s) regulating the translocation step are unknown. Recently, a regulatory sequence element, phi, located immediately upstream of the DR1 sequence at the 3'-end of the pregnomic RNA that is important for efficient viral replication and is complementary to the 5'-half of epsilon was identified. This finding suggests that the translocation of the minus-strand primer from epsilon to DR1 might be mediated by a conformational change in the pregenomic RNA that brings the primer into proximity with the DR1 sequence at the 3'-end of the pregenomic RNA. The conservation of the complementarity between epsilon and phi in the woodchuck hepatitis virus (WHV) and the duck hepatitis B virus (DHBV) genomes also supports this contention. Therefore, the role of the complementarity between epsilon and phi in regulating HBV replication will be examined directly by mutational analysis of these sequence elements. This approach is aimed at identifying possible targets for therapeutic intervention in chronic HBV infection.